A recent Law 360 story by Rachel Graf, “Attys in $29M Och-Ziff Securities Settlement Seek $8.6M Fees,” reports that attorneys who reached a preliminary $28.75 million settlement resolving investors’ allegations that hedge fund Och-Ziff Capital Management Group LLC downplayed investigations into an African bribery scheme asked a New York federal court for $8.63 million in fees.  The investors’ attorneys said the amount, representing 30 percent of the total settlement, is reasonable since they worked for four years to achieve a “significant” settlement that was worth as much as roughly 28 percent of the estimated class-wide damages.  The attorneys are asking to be reimbursed for $401,240 in expenses as well.  “Considering the extensive investigations, motion practice, and discovery completed at the time of the settlement, the time and labor expended by class counsel here amply supports the requested fee,” the filing said.

In October, Och-Ziff and its former CEO Daniel S. Och and former CFO Joel M. Frank agreed to pay almost $29 million to resolve allegations they concealed an African bribery scheme and subsequent investigations by U.S. regulators that ultimately cost the company about $412 million and caused its stock price to fall, allegedly harming investors.  The investors’ attorneys said their requested award is justified by the risks and complexity of the case, the time and effort they put into it, the quality of their legal work and the expenses they incurred.

Each of the two class representatives is requesting $5,000.  “Class representatives and class counsel undertook the risky task of pursuing this litigation, with no guarantee of the positive outcome they achieved,” the filing said.  The investors' suit claimed Och-Ziff touted its "reputation for integrity," "transparency" and "strong financial, operational and compliance-related controls" even though the company was allegedly engaged in a years-long bribery scheme.  The company and executives bribed foreign officials in exchange for "hundreds of millions" of dollars' worth of business in Africa, violating the Foreign Corrupt Practices Act, an amended complaint said.

The U.S. Securities and Exchange Commission and the U.S. Department of Justice began an investigation in 2011, but Och-Ziff hid the probes from investors until The Wall Street Journal published an article in 2014 about deals in Libya, the investors said.  At that point, the company simply said the investigations involved the FCPA and "related laws," according to the amended complaint.  Two years later, the WSJ published another article that stated the DOJ was pursuing a criminal guilty plea and the SEC wanted to fine Och-Ziff as much as $400 million, sending shares of the company down more than 13 percent, the investors said.

Och-Ziff ultimately admitted to violating the FCPA in 2016 and agreed to pay about $213 million in a deferred prosecution agreement with the DOJ and $199 million in disgorgement to the SEC.  The case is Arthur Menaldi et al. v. Och-Ziff Capital Management Group LLC et al., case number 1:14-cv-03251, in the U.S. District Court for the Southern District of New York